U.S. Markets closed
  • S&P Futures

    3,230.50
    -0.75 (-0.02%)
     
  • Dow Futures

    26,685.00
    0.00 (0.00%)
     
  • Nasdaq Futures

    10,812.25
    -16.75 (-0.15%)
     
  • Russell 2000 Futures

    1,450.90
    +4.20 (+0.29%)
     
  • Crude Oil

    39.55
    -0.38 (-0.95%)
     
  • Gold

    1,863.30
    -5.10 (-0.27%)
     
  • Silver

    22.35
    -0.75 (-3.27%)
     
  • EUR/USD

    1.1662
    0.0000 (-0.0000%)
     
  • 10-Yr Bond

    0.6760
    +0.0120 (+1.81%)
     
  • Vix

    28.58
    +1.72 (+6.40%)
     
  • GBP/USD

    1.2715
    -0.0011 (-0.0826%)
     
  • BTC-USD

    10,314.41
    +64.94 (+0.63%)
     
  • CMC Crypto 200

    208.76
    -5.21 (-2.43%)
     
  • FTSE 100

    5,899.26
    +69.80 (+1.20%)
     
  • Nikkei 225

    23,214.49
    -132.00 (-0.57%)
     

What You Need To Know About Spectrum Pharmaceuticals, Inc.'s (NASDAQ:SPPI) Investor Composition

Simply Wall St

The big shareholder groups in Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Companies that have been privatized tend to have low insider ownership.

Spectrum Pharmaceuticals is a smaller company with a market capitalization of US$583m, so it may still be flying under the radar of many institutional investors. In the chart below, we can see that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about Spectrum Pharmaceuticals.

See our latest analysis for Spectrum Pharmaceuticals

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Spectrum Pharmaceuticals?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Spectrum Pharmaceuticals. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Spectrum Pharmaceuticals' historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
earnings-and-revenue-growth

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Our data indicates that hedge funds own 5.6% of Spectrum Pharmaceuticals. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. The company's largest shareholder is BlackRock, Inc., with ownership of 14%. For context, the second largest shareholder holds about 8.6% of the shares outstanding, followed by an ownership of 5.6% by the third-largest shareholder.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 22 shareholders, meaning that no single shareholder has a majority interest in the ownership.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Spectrum Pharmaceuticals

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

We can see that insiders own shares in Spectrum Pharmaceuticals, Inc.. In their own names, insiders own US$10m worth of stock in the US$583m company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, with a 39% stake in the company, will not easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we've discovered 3 warning signs for Spectrum Pharmaceuticals that you should be aware of before investing here.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.